FAQ: Social Security Representative Payees

What is a representative payee for social security?

Sometimes people who get monthly Social Security or Supplemental Security Income (SSI) benefits need help managing their money. In these cases, the Social Security Administration (SSA) can appoint a relative, friend, or other interested party to serve as the “representative payee.” Social Security will thoroughly investigate those who apply to be representative payees to protect the interests of Social Security beneficiaries because a representative payee receives the beneficiary’s payments and is given the authority to use them on the beneficiary’s behalf. If you agree to serve as a representative payee, you’ve taken on an important responsibility that can make a positive difference in the beneficiary’s life.

May I collect a fee for serving as a representative payee?

The law prevents most payees from collecting a fee for their payee services, but under certain circumstances, some organizational payees are granted approval to do so. Any organization that wishes to collect a fee for payee services must first apply and receive written authorization from the SSA.

May I be reimbursed for "out-of-pocket" expenses?

You may receive a reimbursement from the beneficiary's funds for actual expenses incurred in providing services for the beneficiary. Some typical reimbursable expenses are long distance phone calls, the cost of money orders, and transportation costs (e.g., cab fare or mileage), etc. To claim a reimbursement, you must keep records of your expenses.

How often do I have to report to SSA on how I used funds?

The SSA will send you a "Representative Payee Report" at least once a year for each beneficiary you serve.
The report is easy to complete if you keep clear monthly records of the payments you received and how you spent and saved the money. You must answer all the questions on the report and return it to the SSA as soon as possible. Many payees are eligible to report using the Internet. Be sure to read the instructions you receive with your annual accounting report for more details regarding online reporting. In addition to the Representative Payee Report, the SSA may also visit payees in person to see how they are doing.

What type of bank account should I set up?

You must establish an account that clearly shows you are acting in a fiduciary role and that the money belongs to the beneficiary, not you. You should try to set up an account that earns interest, minimizes fees and helps you keep clear records. The Treasury Department requires all federal benefit payments to be made using a form of electronic payment. We recommend that you hold benefits in a checking or savings account to protect against loss or theft. Also, don’t mix the beneficiary’s funds with your own or other funds.

What happens when the  beneficiary dies? 

If the beneficiary dies, you must give any saved benefits belonging to their estate to the legal representative of the estate, or the savings must be handled according to state law. When a person who receives Social Security benefits dies, no check is payable for the month of death, even if they die on the last day of the month. You must return any check received for the month the beneficiary died. An SSI check, however, is payable the month of death. But you must return any SSI checks that come after the month of death.

Questions? Takacs McGinnis Elder Care Law may be able to help. Just give us a call at 615.824.2571.

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